In Oracle's lawsuit, both sides fought hard in court. Oracle scored court permission to use multiple emails from top Google executives and Android engineers, which cumulatively indicated that it may have knowingly have violated Oracle's intellectual property. Google returned fire, airing a 2007 statement from ex-Sun Microsystems CEO Jonathan Schwartz endorsing Google's use, which indicated that it might have been unofficially authorized/condoned after all.

However, it appears Google is prepared to come out relatively well from the patent dispute. While Oracle had sought up to $6.1B USD in infringement damages, ultimately, it will almost certainly end up with less than $100M USD in damages for pass infringement.

That's a huge win for Google and its Android partners.

The lower settlement estimations come based on Oracle's expert witness Dr. Iain M. Cockburn, who is a professor of finance and economics at Boston University. Dr. Cockburn initially had delivered an estimate of $1.4B-$6.1B USD.

U.S. District Court Judge William Alsup, who at times has admonished both Google and Oracle, voiced critism about Dr. Cockburn's initial approach. He pointed out that of Oracle's 22 acquired Java patents, Dr. Cockburn had drastically upgraded the value of the 6 in contention in the case. He ruled that only an equal valuation of the entire portfolio was possible.

II. Oracle Sets Its Sights Lower

Dr. Cockburn was forced to deliver a new valuation, which was much lower. Ultimately it looks like Oracle may get ~$5M USD for direct infringment of U.S. Patent No. 5966702 "Method And Apparatus For Preprocessing And Packaging Class Files", and U.S. Patent No. 6910205 "Interpreting Functions Utilizing A Hybrid Of Virtual And Native Machine Instructions", according to Groklaw.

It will then get an extra $27M-$37M USD for the copyright infringement. Overall this will all stack up to about $40M USD.

Android may get off in the Oracle lawsuit surprisingly easy [Image Source: Android and Me]

Here's where it get's a bit confusing -- Oracle has already withdrew its claim on the '205 patent, as it was invalidated by the U.S. Patent and Trademark Office. But Google is now also being sued for another second patent -- U.S. Patent No. 6,061,520 "Method and system for performing static initialization". This won't likely lead to any big shift in the settlement amount, but it means there may be a mistake in some of the court documents from Google/Judge Alsup, printed by Groklaw, which refer to the '205 (invalid) patent, when in fact it appears they mean the '520 (asserted) patent.

What does all this mean? Google will likely pay less that $100M USD in damages, a small slap to the world's largest smartphone OS maker. It will likely have to pay a bit of ongoing royalties, but with only 2 asserted patents, it's unclear whether that sum will be truly that onerous versus the 6, highly overvalued patents that Oracle originally hoped to beat money out of Google with.

Actually the copyright part of the case is a pretty novel theory. Android does not use the APIs to access a similar Java Virtual Machine, they access a Dalvik virtual machine. And this isn't just being cute--Google needed a real-time VM, which Sun/Oracle did not have at the time. So the API calls although identical in form, access different semantics.

Anyway, given the Mayo Clinic decision by the US Supreme Court last week, I think that Oracle would be lucky to get off at this point for under $100 million. Well, the judge basically told the parties that there is nothing much left of the case to decide, so go settle. Google may be willing to walk away and pay their own costs, if Oracle offers a free patent and copyright license to Google. Does it really look that bad for Oracle? Sure. Their patents are falling left and right, the API claims are a significant stretch, and given the pre-trial decisions on what some phrases mean, Oracle chances on the API issue are between slim and none. (Google's counterclaims are such that they can't realistically be decided until the Oracle patent and copyright issues are resolved. So at least they are still standing at this point.)

"If you look at the last five years, if you look at what major innovations have occurred in computing technology, every single one of them came from AMD. Not a single innovation came from Intel." -- AMD CEO Hector Ruiz in 2007